Supreme Court: “willful blindness” to patent infringement not OK

In a case involving a French deep fryer, the Supreme Court has held that …

In a lopsided 8-1 ruling, the Supreme Court on Tuesday held that "willful blindness" to the existence of a patent will not save you from charges of inducing other companies to violate the patent at issue. The case has drawn interest from the software industry because a lower court decision had chosen a laxer standard, "deliberate indifference," that a coalition of software companies warned would be bad for innovation. The Supreme Court agreed with the lower court that the defendant here was liable, but it did so with a narrower rule that is less likely to ensnare inadvertent infringers in future.

And it all began with a deep fryer.

Don't look too closely

The case involves the French company SEB, which developed a "cool touch" deep-fryer in the late 1980s. SEB obtained a patent on the design in 1991, and began selling it in the United States under its "T-Fal" brand.

The petitioner in the case, a Hong Kong-based company called Pentalpha Enterprises, is not a sympathetic defendant. Pentalpha purchased one of SEB's deep fryers and developed a knock-off version. It hired a lawyer to conduct a patent search, conveniently failing to mention that it had copied the design from SEB. When the lawyer failed to find SEB's patents, he "issued an opinion letter stating that Pentalpha’s deep fryer did not infringe any of the patents that he had found." With this letter in hand, Pentalpha offered its design to US manufacturers. Sunbeam—apparently unaware it was buying a knock-off—began selling Pentalpha's product in the United States.

There's no dispute that Sunbeam and Pentalpha are both guilty of patent infringement. Sunbeam has already settled with SEB. The question before the Supreme Court is whether Pentalpha is also liable for inducing the infringement of Sunbeam and other companies, which is a separate offense under the law.

The courts have said that a finding of inducement requires actual knowledge of patent infringement. Because Pentalpha bought an overseas version of SEB's deep-fryer that did not have US patent numbers stamped onto it, it claims that it did not know that the deep fryer was patented, and therefore did not meet the "actual knowledge" standard.

An eight-member majority of the high court didn't buy this argument. Justice Alito appealed to the criminal law concept of willful blindness, which holds that defendants cannot escape liability by "deliberately shielding themselves" from relevant facts. The decision built on the 2005 Grokster decision, which held the file-sharing company liable based on evidence that it had deliberately induced its users to infringe copyrights. The concept of willful blindness has not traditionally been used in civil patent cases, but this week's decision changes that.

The lone dissenter was Justice Kennedy, who worried that the Supreme Court was over-stepping its authority. "Willful blindness is not knowledge; and judges should not broaden a legislative proscription by analogy," Kennedy wrote. He suggested that the evidence might show Pentalpha had actual knowledge that it was infringing SEB's patents, and he would have let lower courts explore that possibility.

But the Supreme Court rejected the "deliberate indifference" standard the United States Court of Appeals for the Federal Circuit announced in its ruling last year. A coalition of companies that included Yahoo!, eBay, and Red Hat, had filed an amicus brief urging the Supreme Court to do just that. They argued that in Grokster, the court "emphasized the wisdom of limiting secondary liability to the truly culpable." They warned that the Federal Circuit's lax standard "threatens to chill innovation and waste resources in a time of shrinking research and development budgets."

Only Justice Kennedy would have gone as far as these companies requested and required actual knowledge of a specific patent. But the high court's "willful blindness" standard is stricter than the Federal Circuit's "deliberate indifference" rule. The danger to inadvertent infringers in the software industry is correspondingly less.

Red Hat's Rob Tiller praised the ruling. "I'm pleased that the Supreme Court held that inducement requires knowledge that the inducted acts constitute patent infringement," he told Ars. He said that non-practicing entities (a.k.a. "patent trolls") frequently make inducement claims, and he said that Tuesday's decision would "form a partial barrier" against them.

It's worth noting how far removed this case was from the kind of software patent dispute we've covered extensively at Ars. In a sane patent system, the kind of direct copying at issue in this case would be the normal sort of dispute, and inadvertent infringement due to independent invention would be the exception. Yet few, if any, of the software patent cases we've covered involve actual copying.

Indeed, in the software industry, patent law is usually unnecessary to protect against actual copying of code, because that copying is an infringement of copyright. So patent litigation tends to involve broad patents that numerous companies infringe by accident. Tuesday's Supreme Court ruling helps to limit the damage this type of litigation can do to the software industry.

Timothy B. Lee / Timothy covers tech policy for Ars, with a particular focus on patent and copyright law, privacy, free speech, and open government. His writing has appeared in Slate, Reason, Wired, and the New York Times.